PBOC stresses privacy balance in digital yuan development

The People’s Bank of China, in developing the digital yuan (e-CNY), must strike a delicate balance between privacy and the fight against illicit activity, Yi Gang, governor of the central bank, said, Bloomberg reports.

“Anonymity and full disclosure of information are not as simple as black and white,” the official said during a speech at the Hong Kong FinTech Week.

According to him, the regulator aims to protect privacy and financial security through “managed anonymity.” Yi Gang explained that parties not directly involved in a transaction would not be able to identify consumers’ personal data.

China has been testing the e-CNY for three years. Trials were conducted in Shenzhen, Suzhou, Xiongan, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian, and the zone hosting the Winter Olympic Games.

In July 2021, Chengdu, the capital of Sichuan province, tested the digital yuan with programmable use cases.

In spring 2022, former PBOC governor Zhou Xiaochuan noted that the e-CNY is primarily intended for the general public and merchants, not to replace SWIFT or “turning currency into a weapon.”

The former official added that for cross-border payments the digital yuan could be adapted in the future, but even then, CBDC would remain oriented toward retail users.

Earlier in September, media reported the expansion of e-CNY testing to four provinces.

According to the People’s Bank of China, by the end of summer 2022 the cumulative transaction volume of the digital asset reached 100.04 billion yuan (~$14 billion).

Read ForkLog bitcoin news in our Telegram — cryptocurrency news, rates and analytics.